October Housing Scorecard a Reason for Optimism

An optimistic showing from U.S. housing markets over the last month has been revealed by new data released by the Obama administration. The October Housing Scorecard Report showed that sales of new homes rose to 26,100 in the last month, but while this is more sales than August’s total of 24,700 new home sales, it’s down from September 2010’s total of 26,300 new home sales.

On the plus side however, sales of existing homes did grow, rising to 409,200 for September 2011, a 10% increase on September 2010’s total of 367,250. The previous month saw more existing home sales though, with 421,700 transactions recorded in August 2011.

Also in September, Raphael Bostic, of the Department of Housing and Urban Development, revealed that foreclosure prevention programs contributed to a decline in the number of mortgage defaults, as these programs were expanded to reach more borrowers:

“Last month we saw a continued fall in mortgage defaults… And in the last quarter, a million more homeowners refinanced their loans under some of the lowest interest rates in history.”

Altogether, September 2011 saw 70,700 default notices filed against delinquent borrowers, as compared with 102,400 in September 2010. This is a drop of almost 31% year on year. This figure is also a decrease from the previous month’s total of 78,900 foreclosure starts.

Refinance originations for September were also lower than a year ago, recorded at 964,000 compared with 1,341,000 in September 2010, a decrease of 28%.

There were also more first-time buyers getting themselves on the property ladder last month. 217,000 homes were sold to first-times, compared with 196,000 in the same month last year.

Bostic said that the Obama administration had done much to make it easier for borrowers to refinance their mortgages at more affordable interest rates. Refinancing at rates close to 4% is now a lot more common, meaning that homeowners now have more money to spend, something that will help to boost the U.S. economy.